Partner: Lilly may halt inhaled insulin project

The company helping Eli Lilly and Co. develop inhaled insulin said it expects Lilly to scuttle the project next week.

Massachusetts-based Alkermes Inc. said in a news release this morning that Lilly officials have told the company they are evaluating the business prospects for inhaled insulin, called AIR Insulin. Alkermes’ statement said company officials are not aware of any safety, efficacy, or manufacturing issues that have arisen since Lilly officials said in January they were pushing ahead with the program.

Diabetes patients now must inject insulin to keep their blood-sugar levels under control, but drug companies thought patients would embrace an alternative to using needles. Patients already spend $7 billion a year on insulin, and the worldwide prevalence of diabetes is expected to double by 2030.

But the first inhaled insulin product on the market, Pfizer Inc.’s Exubera, failed miserably. Sales never took off as patients and doctors complained about Exubera’s bulky delivery device. In October, New York-based Pfizer gave its rights to Exubera back to its development partner, Nektar Therapeutics, and took a $2.8 billion charge. It also put 600 workers at its Exubera factory in Terre Haute on paid leave.

In January, Denmark-based Novo Nordisk A/S discontinued its inhaled insulin program, a partnership with Aradigm Corp.

Lilly and Alkermes have been testing AIR Insulin in a broad Phase 3 clinical trial for patients with type 1 and type 2 diabetes. The worldwide trial is scheduled to be completed this year. Lilly has said it would submit AIR insulin for regulatory approval in 2009.

In its news release, Alkermes said that Lilly has the right to terminate its license to AIR Insulin at its discretion. Alkermes said it wants to complete the clinical trial even if Lilly decides not to commercialize inhaled insulin.

A message to a Lilly spokesman was not immediately returned.